Analysts Have Made A Financial Statement On Carpenter Technology Corporation's (NYSE:CRS) Second-Quarter Report

Carpenter Technology Corporation (NYSE:CRS) shareholders are probably feeling a little disappointed, since its shares fell 4.5% to US$63.41 in the week after its latest quarterly results. Revenues came in 4.8% below expectations, at US$624m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.85 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Carpenter Technology

Taking into account the latest results, the consensus forecast from Carpenter Technology's four analysts is for revenues of US$2.80b in 2024. This reflects a modest 2.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 38% to US$4.00. In the lead-up to this report, the analysts had been modelling revenues of US$2.84b and earnings per share (EPS) of US$4.02 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$86.00. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Carpenter Technology analyst has a price target of US$100.00 per share, while the most pessimistic values it at US$75.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Carpenter Technology is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Carpenter Technology's rate of growth is expected to accelerate meaningfully, with the forecast 5.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Carpenter Technology is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Carpenter Technology analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Carpenter Technology that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.